Today, Fitch Ratings ("Fitch") has maintained EDP - Energias de Portugal, S.A.'s ("EDP") and EDP Finance B.V.'s long-term Issuer Default Ratings ("IDR") and senior unsecured ratings at "BBB+" and kept them on Rating Watch Negative ("RWN"). EDP's short-term IDR is also maintained at "F2", on RWN. Additionally, the agency has maintained Hidroelectrica del Cantabrico, S.A.'s Long-term IDR at "BBB+" and its Short-term IDR keeps at "F2", both remain on RWN.

EDP's ratings benefit from certain international diversification and the weight of EDP's EBITDA generated outside Portugal has increased to 61% of total group EBITDA in 1H11, compared to 45% in 1H10. However, the group's Iberian operations remain the key driver of its creditworthiness and while Fitch recognises EDP's solid liquidity position and expects, in its base case scenario, EDP to retain funding access, the company may face increased funding costs due to the contagion from difficulties faced by the sovereign.

The RWN reflects the possibility of a downgrade in the near term, as a result of a potential sovereign rating downgrade. However, the agency acknowledged that the notching difference between EDP and the sovereign is likely to widen beyond the current two notches in the case of a further sovereign downgrade.

EDP – Energias de Portugal, S.A.